1. Field of the Invention
The present invention relates to management of multidimensional inventory, and more particularly to a system and method for managing that inventory in a way that satisfies demand from multiple customer segments differentiated by a set of buyer preferences.
2. Related Art
Media providers include broadcast stations such as, e.g., television and radio stations and other media including such others as cable television systems. Generally, the media industry differs in its handling of inventory from other industries based on the product it sells, i.e., advertising. For example, the process by which media providers compute a price for a given amount and type of media exposure and provide a quote to an advertiser differs significantly from related inventory management processes in other industries.
While generally dissimilar, media inventory, i.e. advertising time slots, have some similarity to other industry inventory such as, e.g., airline seat inventory. In particular, both forms of inventory are perishable. Once a flight has taken place, the seat is no longer available for sale on that flight. Similarly, once the media program having an inventory item within which an advertising spot can be sold has run, that inventory item of advertising time is depleted.
Thus as noted above, for several reasons media inventory differs from other industries' inventory. A unique aspect of media inventory is that each inventory item can satisfy a variety of customers with different buying preferences to a greater or lesser extent, depending on the characteristics of the inventory item. Such characteristics can include, for example, time of day or day of the week of the advertising slot, characteristics of a program's audience, program popularity, and cost of advertising at a particular time. In addition, these inventory items are often packaged into groups to satisfy each customer's request. For example, an advertiser may want to run an advertisement a certain number of times per day or per week over the course of multiple weeks. The advertiser may want to reach a certain number of people within a target audience a certain number of times. In addition, the advertiser may be willing to purchase a group of advertising slots if a certain group of television shows are included in the package. For example a salesperson at a TV station conventionally bundles a number of advertising slots or inventory items together into a package in order to satisfy a given buyer's requirements. Finally, the number of transactions is small relative to the number of transactions in industries such as the airline industry. Because of the small number of transaction samples, it is conventionally very difficult, within the media industry, to capture complex packaging patterns of buyers in a traditional statistical model within distinct buyer segments.
Therefore, due to the small sample sizes, traditional inventory management models used by high volume but limited choice industries, such as the airline industry, are insufficient and inaccurate in their attempts to model demand within industries that involve complex transactions such as media distribution and broadcasting.
What is needed then is a tool that optimizes inventory allocation and pricing decisions that accurately reflect expected demand in various segments defined in terms of a set of customer preferences. It is further desirable that a tool be provided that better characterizes buyer behavior and that prices inventory in a way that maximizes revenue for a given level of demand.